Online Betting Firms Gamble On Soccer-mad Nigeria

By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is flourishing in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown innovation companies that are beginning to make online businesses more practical.
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For years, mobile payments stopped working to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have promoted a culture of cashless payments.


Fear of electronic scams and slow internet speeds have held Nigerian online consumers back however sports betting firms says the brand-new, quick digital payment systems underpinning their websites are changing attitudes towards online transactions.


"We have seen considerable development in the number of payment options that are offered. All that is certainly altering the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.


"The operators will choose whoever is faster, whoever can link to their platform with less problems and problems," he said, including that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.


That growth has been matched by a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve bank and certified banks.


In 2016, there were 14 million web payments worth an overall 132 billion naira ($420 million). Transactions leapt to 29 million worth 185 billion in 2017 and in the very first quarter of 2018 there were nearly 10 million worth 61 billion.


With a young population of almost 190 million, rising smart phone usage and falling information expenses, Nigeria has long been seen as a terrific opportunity for online organizations - once customers feel comfy with electronic payments.


Online sports betting companies say that is happening, though reaching the tens of millions of Nigerians without access to banking services stays a challenge for pure online retailers.


British online wagering firm Betway opened its first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.
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"There is a progressive shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya said.


"The development in the variety of fintechs, and the government as an enabler, has assisted business to prosper. These technological shifts encouraged Betway to start running in Nigeria," he said.


FINTECH COMPETITION


sports betting firms cashing in on the soccer craze whipped up by Nigeria's involvement on the planet Cup say they are discovering the payment systems developed by local startups such as Paystack are showing popular online.


Paystack and another regional start-up Flutterwave, both founded in 2016, are supplying competition for Nigeria's Interswitch which was established in 2002 and was the main platform used by businesses operating in Nigeria.


"We included Paystack as one of our payment options with no fanfare, without revealing to our customers, and within a month it shot up to the number one most secondhand payment option on the site," stated Akin Alabi, creator of NairabBET.


He said NairaBET, the country's second most significant sports betting firm, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative given that it was included late 2017.


Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage funding in Silicon Valley's Y-Combinator program.


In December 2016, it raised $1.3 million from investors including China's Tencent and Comcast Ventures in the United States.


Paystack, based in the mad Ikeja district of Lagos, stated the number of regular monthly deals it processed rose from about 8,000 in early 2016 to more than 900,000 as of June 2018.


"In early 2016 we were processing about $3,000 a month. Today we process well over $11 million every month," said Emmanuel Quartey, Paystack's head of growth.


He said a community of had actually emerged around Paystack, creating software application to integrate the platform into sites. "We have actually seen a development in that community and they have actually brought us along," said Quartey.


Paystack stated it makes it possible for payments for a number of sports betting firms but also a vast array of companies, from utility services to carry companies to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme along with investor Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million last year.


FOREIGN INVESTMENT


Shifts in Nigeria's payment culture have actually corresponded with the arrival of foreign financiers hoping to take advantage of sports betting wagering.
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Industry professionals state the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where business is more established.


Russia's 1XBet and Slovakia's DOXXbet have both set up in Nigeria in the last two years while Italy's Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm launched in 2015.


NairaBET's Alabi said its sales were split in between shops and online but the ease of electronic payments, expense of running stores and capability for consumers to avoid the stigma of sports betting in public indicated online transactions would grow.


But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a store network, not least because lots of clients still remain unwilling to spend online.


He said the business, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting stores typically act as social centers where consumers can see soccer complimentary of charge while placing bets.


At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans gathered to see Nigeria's last warm up game before the World Cup.
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Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a TV screen inside. He said he began sports betting 3 months earlier and bets up to 1,000 naira a day.


"Since I have been playing I have not won anything but I believe that one day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)
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